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Stablecoins have become or are becoming regulated in many jurisdictions because of the instabilities and losses that have occurred in past attempts to create stable coins. Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master’s in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology.
For instance, in November 2021, Senator Cynthia Lummis (R-Wyoming) called for regular audits of stablecoin issuers, while others back bank-like regulations for the sector. In 2024, Senators Lummis and Kirsten Gillibrand introduced a bill to create a regulatory framework for stablecoins. Their proposed framework would prohibit anyone from issuing a stablecoin unless they were a registered non-depository trust or a sql server dba job description template depository institution with authorization to issue them. That has led to a rise in other US Dollar-backed stablecoins that have more transparent funding and auditing processes. These include Gemini dollar, True USD, Paxos, and US Dollar Coin (USDC).
- This is an important step forward for the crypto market, as it allows regulated institutions to begin offering crypto products without worrying about volatility risk.
- All this volatility can be great for traders, but it turns routine transactions like purchases into risky speculation for the buyer and seller.
- This guide will explain what USDC is, how it maintains its peg to the US Dollar, and whether it’s safe to use.
- For instance, in November 2021, Senator Cynthia Lummis (R-Wyoming) called for regular audits of stablecoin issuers, while others back bank-like regulations for the sector.
USDC priceUSDC#8
Our go-to recommendation for safe crypto storage, as always, is to invest in a robust hardware wallet. Failing that, consider using one of our top software wallet picks for smartphones and PCs. As for the technical aspects of the token, USD Coin is similar to most other cryptocurrencies in that it uses blockchain technology.
How Do I Buy USDC?
Given its similarity to traditional fiat currency USD and familiar unit of account, USDC is heavily used as a trading currency between other cryptocurrencies. Moreover, given its relatively stable price point, crypto investors will use USDC to hedge against market volatility. USDC is a privately-operated project that is not affiliated with the US government. Stablecoins are a reliable alternative to the volatility of traditional cryptocurrencies as they maintain price stability (most of the time). Among the popular stablecoins is Centre’s USD Coin (USDC), a tokenized US dollar. USDC is backed the scientific controversy behind memes by dollar assets equivalent to one US dollar, making it a familiar unit of account to transfer value across the network and convert it into other cryptocurrencies.
Which Blockchains Is USDC Available On?
It’s worth mentioning that USD Coin follows current regulations and would likely have fewer issues with any new rules compared to other stablecoins. You can make passive income with USD Coin by lending it, and that’s one of the reasons investors buy it. There are several crypto lending programs available that will pay you interest for lending your crypto. Gemini and CoinLoan are among the platforms that support USD Coin lending and offer triomarkets review 2020 competitive interest rates.
These features mean USDC is reasonably secure both technically and financially. The reserve backing of USDC comprises a mix of assets, the full details of which are not completely disclosed by Circle and Coinbase. Although they follow US regulations, it’s understandable that you may want to know the full details of how they are backing your assets.
If the reserves aren’t managed properly, you could end up losing your funds. USD Coin is widely considered to be the safer option because of its transparency. Its management has provided reports since its launch, verifying its reserves.
While the first stablecoins maintained pure cash reserves, many have adopted low-risk assets such as treasury bonds as well. Either way, an equivalent amount of money needs to exist before units of the stablecoin can be minted. Stablecoins are cryptocurrencies with a peg to other assets, such as fiat currency or commodities held in reserve. The intent behind them is to create a crypto asset with much lower price volatility, which makes them better for use in transactions. You can buy USDC on almost every centralized and decentralized exchange today.
USD Coin and Tether (USDT) together account for 80% of the capitalization of the global stablecoin market. USDC maintains a price $1 price by holding fiat currency equal to the amount of circulating USDC. Its price might vary in $0.0001 increments, but for the most part it is pegged. Crypto rug pulls cause billions of dollars in loses in the global crypto markets. Buying solana (SOL) is straightforward, but with numerous crypto exchanges on the market, it’s crucial potential investors consider other key factors before making a purchase….
Circle has also partnered with two of the largest payment networks in the world and some popular payment processors. In December 2020, Circle partnered with Visa, allowing businesses on the Visa network to accept USD Coin. In July 2021, Mastercard (MA 1.12%) announced plans to incorporate USD Coin as a payment method. Payment processors Stripe and Checkout.com both announced support for USD Coin in 2022.
Stablecoins are a type of cryptocurrency whose value is pegged to another asset, such as a fiat currency, a commodity or even another crypto coin. Central bank digital currency (CBDC) aims to take the benefits from blockchain-based digital currency and combine it with fiat currency under the control of the central bank. USDC can be bought on a variety of cryptocurrency platforms, including the Crypto.com App and Exchange.It’s also important to note that USDC is not available on all platforms. Some cryptocurrency exchanges may not offer this token due to regulatory or other considerations. Therefore, you may need to try multiple platforms to find one that supports USDC. Traditionally, Ethereum’s own cryptocurrency, ether (ETH), was used for payments connected to these smart contracts.